Medicare Oversight of Casualty Claims Programs
Recent legislation (Public Law No. 110-173) has expanded the definition of the administrative requirements designed to protect the Medicare system from medical expenses considered the primary obligation of private sector plans, including insured and self-insured workers’ compensation, liability and no fault plans.
The Social Security Act (MSP-1980) requires that parties to a settlement protect Medicare's interests as a secondary payor to other available insurance plans. Protecting Medicare's interests has meant reimbursing monies paid by Medicare as "conditional payments" and establishing an allocation for the payment of future Medicare eligible medical expenses.
The Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA-111) creates reporting requirements that will enable Medicare to examine settlements, judgments and awards to ensure that conditional payments are identified and reimbursed. If the settlement does not contain an allocation, Medicare has a statutory right to recover up to the entire amount of the settlement, judgment or award. The Act does not change current practices regarding Medicare set-aside agreements (MSAs) but rather emphasizes positive enforcement of protection and recovery measures for Medicare with respect to all classes of casualty claims.
Effective under the new regulations:
- The Responsible Reporting Entities (RREs) or its designated agent must make a specific determination for each claimant under a workers' compensation, liability or PIP (personal injury protection)/no-fault program regarding whether the party is a Medicare beneficiary.
- For Medicare beneficiaries, information regarding the claimant and claim must be reported to the Center for Medicare and Medicaid Services (CMS) so that a determination can be made regarding coordination of benefits and applicable recoveries.
- A penalty of $1,000 per claim per day will be assessed against any applicable plan for cases of non-compliance.
CorVel has been active in the provision of Medicare Set-Asides since 2001 and also provides "agent" services under the new regulations. The determination process involves an electronic data interface with CMS to be performed by "agents". CorVel has an established relationship with CMS via our ongoing MSA services, and is also involved in other clearinghouse and electronic records transmissions services for state governments, our existing insurer, and TPA clients.
Please contact us today for more information.
